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How to Fund your Small Business

Looking to fund your new venture? Here are some ways to find funding and how to be better prepared before you ask for funding.

Standard Bank




The launch and maintenance of a small business requires a great deal of time, patience, and capital. Though many aspiring business owners have the first two qualities in abundance, the last asset is harder to secure. Fortunately, there is a great deal of advice and a range of funding options available for those who believe they have the knowledge and the skills necessary for commercial success.

Related: 3 Ways to Fund Your Franchise (and 3 Ways You Should Not)

Ethel Nyembe, Head of Small Enterprises at Standard Bank, says most, if not all, entrepreneurs rely on lenders to provide the capital they need to open and maintain a business. This money will be used to cover the start-up cost of the enterprise, and also the operating costs, because it may take several months before you start turning a profit.

Below are the different types of funding for entrepreneurs to consider: 

1. Khula

Khula, the government’s small business finance agency, offers what is known as a credit guarantee scheme. The scheme guarantees that the bank will be paid in the event that the business owner defaults on their obligation: up to 50% to 90% of the bank loan can be indemnified. The maximum amount that can be approved under the scheme is R3 million.

To qualify for a Khula-supported loan, you will need to invest some of your own capital or resources. This may be as much as 10% of the amount you want to borrow, and can be either cash or equipment. 

2. Business Partners and Seda

Business Partners and the Small Enterprise and Development Agency (Seda) fund entrepreneurs, but they generally work with established businesses that want to expand.

One benefit you can derive from them, however, is the wealth of information contained on their websites (, ).

3. Buying a franchise

The cost of a franchise ranges from R50 000 to millions. Many organisations let you pay part of the franchise costs out of profits, but they still require a large deposit.

Not all franchises are equal, and there are some unscrupulous operators who are simply in the business of collecting franchise fees.

Before you sign on the dotted line, call some existing franchise holders and find out about the average turnover, working hours and if the franchisor is keeping up their end of the bargain. Your bank is a valuable resource in this area, as they have specialised teams to deal with franchise banking.

Related: Build your Business Legacy through Succession Planning

If you do decide to invest in a franchise, follow these basic rules:

  • Consider partnering with someone you trust and with whom you work well. Not only will this spread the risk, you’ll know the company is in good hands when you’re away.
  • Get a lawyer to look at the contract.
  • Ask the franchisor what the rules are if you want to sell your franchise to a third party.
  • Ask to see their training manuals. If they don’t exist, reconsider the deal.
  • Get a breakdown of the costs involved and proof that the concern is solvent.
  • If you are unsure of the quality of the deal being offered, call the Franchise Association of South Africa (FASA) on: 011 484 1285.

Business plans

A business plan is the cornerstone of a business. It articulates your objectives and focuses challenges and opportunities. With a business plan, you could possibly approach private investors. A good business plan is non-negotiable when approaching the bank for finance.

Back-up fund

You may have a great product or service, but it takes time to accumulate income. You should have at least six months’ worth of living expenses in the bank in addition to your start-up capital. If the first months are lean, at least you won’t be worrying about your regular expenses.

Plan to eliminate all of your short-term debt and a big part of your long-term debt. The less you are forced to take funds from the business, the more capital you will have to grow it.

If you are approached for funding

If you are approached for funding by a friend or family member, ask them for a business plan and about their financial situation. Ask a lot of questions and assess if they have the right skills for the venture.

Related: How to Build Skills, Loyalty and Profits With Staff Training

If you decide to lend money or invest for equity, you should:

  • Be able to afford the investment to the point where if the business failed, it would not compromise your financial future;
  • Draw up an official legal document stating what your role is; what their role is and their obligations to you, should the business fail or succeed.
  • Be prepared to lose your money; and
  • Be prepared to lose a friendship if you have not managed expectations on both sides of the transaction.

“Whether you are running a start-up or funding it, don’t be afraid to ask your business banker for help; they may have resources and ideas that can assist you in achieving your ambition,” says Nyembe. “While a nine-to-five job will give you security and a regular pay cheque, the rewards of being a business owner are worth the extra effort.”

Standard Bank SA is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank SA provides the full spectrum of financial services, with more than 720 branches and over 7 100 ATMs. Independent surveys of customer satisfaction consistently place Standard Bank at or near the top of their rankings. The personal and business banking unit offers banking and other financial services to individuals and small-to-medium enterprises. For further information, go to


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Reimagine The Use Of Technology

The phenomenon of ‘big data’ is rapidly catching up with the world of tax.






As tax professionals we live in a new reality, fueled by the blinding pace of change. The digital revolution is here. Reimagine the future of the tax function through the lens of analytics.

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Enter The 2018 Entrepreneur Of The Year® Competition To Win Prizes Over R2 Million

The Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS aims to honour, benefit and uplift South African SMEs. Now in its 30th year, the competition celebrates excellence in entrepreneurship, serving as an inspiration to others to succeed in the world of business.




Amid the current political optimism, entrepreneurs should be especially inspired by the continued commitment to SME support which emerged as a consistent theme in both the 2018 State of the Nation Address and the National Budget Speech.

This is according to Christo Botes, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who believes that this continued focus evidences Government’s recognition of the vital role played by entrepreneurs in enabling economic growth.

Continued celebration of excellence in entrepreneurship

Speaking in light of the launch of the 2018 competition in Johannesburg today, Botes says that this long-deserved recognition of the SME sector only further validates the competition’s unwavering commitment to celebrating excellence in entrepreneurship and fostering future economic growth.

“Now in our 30th year, this renowned competition continues to pay homage to the fearless South African entrepreneurs who dedicate themselves to their enterprises and businesses: driving growth, combatting unemployment and contributing towards the country’s economic development.”

“It is therefore wonderful to see the public sector taking the required steps to improving the environment in which these entrepreneurs operate in order to promote further growth in the sector.”

Related: Meet The 2017 Entrepreneur Of The Year® Winners

Botes, who is also executive director at Business Partners Limited (BUSINESS/PARTNERS) has been involved in the competition since its inception in 1988, “Looking back over the last 30 years, this competition has evolved from an internal competition that recognized BUSINESS/PARTNERS’ clients only, to a nation-wide search for outstanding South African-based entrepreneurs, with Sanlam as our valued partner.”

Rewards for successful local business owners

He says that the competition continues to reward successful local business owners for the valuable contributions they make to grow their local communities and economies, and aims to inspire others to do the same. “As our 30th- anniversary year, we’re hoping to see even more entrepreneurs enter.

The competition is open to all South African-based businesses and prizes are awarded for the following categories: Overall Entrepreneur of the Year®, Emerging Business Entrepreneur of the Year®, Small Business Entrepreneur of the Year®, Medium Business Entrepreneur of the Year®, Job Creator of the Year and Innovator of the Year,” says Botes.

Botes adds that this year, the 2018 competition will also recognize a South African entrepreneur for a Lifetime Achievement award.

Related: 4 Success Lessons From The Entrepreneur Who Quietly Grew Pinterest Into A $12 Billion Company

“The purpose of this specially nominated award is to recognize an entrepreneur who has made a significant contribution to the South Africa economy and has grown their business from start-up to large-scale, perhaps even multi-national corporation. We want to reward the individuals who have dedicated their lives to building our economy and inspiring others to do the same.”

What the winners can expect

The 2018 Entrepreneur of the Year® competition, sponsored by Sanlam and BUSINESS/PARTNERS, offers prizes valued at over R 2 million, which includes cash prizes of R 70 000 for each main category winner, and R200 000 for the overall winner.

Competition winners will also receive valuable mentorship support, networking opportunities and national media exposure.

Botes says that in celebrating 30 years of searching for entrepreneurial talent in all sectors of the economy, the competition remains fiercely committed to its cause in 2018.

What the judges are looking for?

“The judges are looking for entrepreneurs that have succeeded against the odds, either by carving out a niche market for their product or service offering, or by succeeding in a very competitive environment. Perseverance and endurance, innovation and agility are some of the qualities we look for in the entrepreneur.”

Botes adds that there are also a number of quantitative competition measures, such as turnover growth, profitability, owners’ equity growth, positive cash flows and job creation that play a part in the competition’s judging process.

Entrepreneurs are encouraged to enter the competition and can do so by downloading the entry form online at They can also interact with fellow entrepreneurs, past winners and entrants on the competition’s social media platforms and The closing date for the competition is 31 May 2018.

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Company Posts

This Podcast Interview Will Inspire Every Business Women On International Woman’s Day

Fumani Mthembi and Teresa Oakley-Smith, both MDs and founders of their own successful businesses, share their personal stories of fighting gender and racial stereotypes in pursuit of a dream. Mthembi and Oakley-Smith, spoke at an Investec Women in Leadership event, entitled, “The Courage to Change.” We bring you this inspirational podcast.

Investec Specialist Bank and Asset Management




International Women’s Day highlights the imperative role women play in business, the economy and households. Whilst women have come a long way in terms of recognising their worth, we’ve got a long way to go – and that starts in the boardroom. According to an EY study, there is overwhelming evidence that links gender parity to innovation and improved financial performance.

Businesses with women in top management roles experienced an increase in “innovation intensity” and were worth, on average, about US$40m more than companies with only male leaders. Yet on average, in SA, women earn about 73% of what men earn. (Ipsos 2017 survey)

In a frank and honest chat with Investec, two inspirational female leaders, Fumani Mthembi and Teresa Oakley-Smith, share their extraordinary business journey from having “a big dream” to surviving through the mean and lean times.

Fumani Mthembi, is a founding member of the Pele Energy Group – South Africa’s largest 100% black-owned independent power production and development firm – and MD of its research and development subsidiary, Knowledge Pele (KP), and Teresa Oakley-Smith, is the founder of Diversi-T, a change management consultancy with a focus on transformation and diversity training.

Listen to the podcast below for the full interview.

Here are some of the stand-out highlights from the interview:

1. Overcoming challenges female entrepreneurs face

Both Fumani and Teresa believe that, based on their respective experiences, men don’t take women seriously.

iwd_teresa_fumani_article-image-option-2“It’s very common in my industry to attend a meeting and have all the men address each other and not you,” says Fumani.“So I’ll be sitting there and they’ll all have their backs turned and they’ll be having a conversation amongst themselves.”

“I’ve had to work twice or three times as hard as male competitors to gain a contract; I’ve had to bend over backwards to actually make sure that my delivery is ten times better,” says Teresa.

2. Breaking down stereotypes

“In households of dual income, often the woman is bringing in more than the man, yet when we have to approach institutions of power, we feel somehow belittled, or we somehow lack our courage in an appreciation of the power we actually hold,” says Teresa.

Related: Feel Like Quitting? These 9 Women Prove Grit Can Lead You To Massive Success

“One of my clients is a very large retail company and they only have one woman out of a board of 40, and I was challenging them by saying: Who does the shopping? Women hold the purse strings, women go to the supermarkets, so why are they not represented? Why are their voices not heard?”

3. Encouraging diversity in the workplace

Teresa work centres around helping employers create work environments that encourage intersectionality, and recognise women’s unique needs.

“Does your company provide proper facilities for breastfeeding women and supply feminine hygiene products in case a female staff member is in need?” asks Teresa.


4. Educating about the need for empowerment

Fumani’s aim when starting her company was to transform society through knowledge and power and make a difference through a legacy that creates a new kind of context in which people like herself – a young, black female entrepreneur – could operate. “We wanted to spread the justice dividend and to use our privilege responsibly,” she says.

In her experience, banks struggle to recognise the need for women to seek finance for start-ups, because “they don’t need to take on that kind of risk. And that’s the thing about this dual economy, and as women we represent that second economy,” she says

“We’re a new risk; the things we want to do in this economy are new. Everything we do and present is new and we can be disruptive. So while we can ask for change, we can also be the change, and we can create these institutions that really understand us.”

 5. Seizing the power within you

Both women agree that recognising the challenge of being a woman in South Africa, should lead to women standing together and reclaiming their power. “We can only own our power if we join together as women of all races, ages and abilities and understand each other,” says Teresa.

Related: A Great Time To Be A Woman In Business

Out of Fumani’s 25-strong staff complement, only five employees are men. She puts that down to the talent and intellect shown by her women employees. But this female-male mix is far from the norm. Why? “What I’ve often seen is that women are very risk averse they’re incredibly bright.

We just don’t want to take a bet on ourselves,” says Fumani. “All these institutions are growing on the back women’s efforts. There’s a reason why 54% of graduate are women – we can do it, it’s just a matter of taking that chance on yourself.”

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